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FEMSA ANNOUNCES EARLY TENDER RESULTS AND ACCEPTANCE OF NOTES FOR ITS PREVIOUSLY ANNOUNCED TENDER OFFER

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FEMSA announced early tender results for its offer to purchase up to $250 million in aggregate principal amount of outstanding notes. The offer attracted $206.8 million worth of 3.500% Senior Notes due 2050, which were accepted for purchase. Holders who tendered by June 17, 2024, will receive $794.94 per $1,000 principal amount, including a $30 early tender premium. The initial settlement date is expected on June 20, 2024. The tender offer will expire on July 3, 2024. FEMSA's initiative is part of its strategic review of its business and capital structure announced in February 2023.

Positive
  • FEMSA accepted $206.8 million worth of notes, showing strong participation.
  • Holders receive a premium of $30 per $1,000 principal amount for early tender.
  • The initial settlement date is set for June 20, 2024, ensuring quick execution.
  • Part of a broader strategic review initiated in February 2023, indicating proactive financial management.
Negative
  • Only a portion of notes tendered after the early deadline may be accepted if oversubscribed.
  • Notes tendered cannot be withdrawn, limiting flexibility for holders.
  • The tender offer is to $250 million, potentially not addressing larger financial needs.

FEMSA's early tender results and acceptance of notes under its tender offer introduce valuable insights regarding its current liquidity and debt management strategies. By purchasing notes worth $206.8 million against a total consideration of $794.94 per $1,000 principal amount, FEMSA aims to optimize its financial leverage and cost of capital. The early tender premium of $30 per $1,000 provides an incentive for holders to tender their notes early, showcasing FEMSA’s commitment to managing its liability portfolio proactively.

For retail investors, this move suggests that FEMSA is likely enhancing its balance sheet strength, which could translate into greater financial stability and potential for future growth. However, the long-term benefits depend on how effectively FEMSA utilizes the improved liquidity and reduced debt burden.

The move might also signal FEMSA’s confidence in its cash flow generation capabilities despite current economic challenges. Investors should monitor subsequent financial statements to see how these tendered notes impact overall financial performance.

From a market dynamics perspective, FEMSA’s tender offer and the resultant acceptance of nearly 100% of the tendered notes underscore a strong demand for optimizing debt structure in the corporate sphere. This trend is indicative of market conditions where companies are seeking to manage debt levels proactively amid varying interest rate environments.

By reducing long-dated liabilities, FEMSA also sends a signal to the market about its strategic foresight. This is an important consideration for retail investors who are keen on understanding the company’s long-term strategic positioning and risk management approaches. Observing debt management strategies in conjunction with broader financial performance metrics will provide a clearer picture of the company’s trajectory.

Investors should be aware that while such initiatives are positive, they also need to consider the broader context, including market conditions and potential macroeconomic impacts that could influence FEMSA’s business operations and financial stability.

MONTERREY, Mexico, June 17, 2024 /PRNewswire/ -- FOMENTO ECONÓMICO MEXICANO, S.A.B. DE C.V. ("FEMSA") (NYSE: FMX; BMV: FEMSAUBD, FEMSAUB) today announced the early tender results and acceptance for its previously announced offer to purchase for cash (the "Tender Offer") up to US$250,000,000 (the "Tender Cap") aggregate principal amount of the notes set forth in the table below (all such notes, the "Notes") subject to proration as described in the Offer to Purchase (as defined below), from each registered holder of the Notes (each a "Holder" and, collectively, the "Holders").

The Tender Offer is being made pursuant to the terms and subject to the conditions set forth in the Offer to Purchase dated June 4, 2024 (as amended or supplemented from time to time, the "Offer to Purchase").  

The following table summarizes the early tender results for the Tender Offer as of 5:00 p.m., New York City time today, June 17, 2024 (the "Early Tender Time"):

Notes


CUSIP/ISIN


Principal Amount
Outstanding


Total Consideration(1)


Principal Amount
Tendered


Principal Amount
Accepted for Purchase

3.500% Senior Notes due 2050


344419 AC0 / US344419AC03


US$1,556,946,000


US$794.94


US$206,762,000


US$206,762,000

__________________

(1)

Per US$1,000 principal amount of the Notes validly tendered (and not validly withdrawn) on or prior to the Early Tender Time and accepted for purchase pursuant to the Tender Offer. The Total Consideration (as defined below) for the Notes includes an early tender premium in the amount of US$30 per US$1,000 principal amount of Notes validly tendered on or prior to the Early Tender Time  (and not validly withdrawn) and accepted for purchase pursuant to the Tender Offer (the "Early Tender Premium").

FEMSA has accepted for purchase all Notes validly tendered (and not validly withdrawn) in the Tender Offer on or prior to the Early Tender Time. Holders who validly tendered (and not validly withdrew) their Notes on or prior to the Early Tender Time and whose Notes have been accepted for purchase are entitled to receive the total consideration set forth in the table above (the "Total Consideration"), which includes the Early Tender Premium, plus accrued and unpaid interest on the accepted Notes from and including the last interest payment date to, but not including, the Initial Settlement Date (as defined below) and additional amounts thereon, if any.

Notes tendered on or prior to the Early Tender Time, which have been accepted for purchase on the Initial Settlement Date will have priority over Notes tendered after the Early Tender Time. If the Tender Offer is oversubscribed at the Expiration Time, then only a portion of Notes tendered after the Early Tender Time may be accepted for purchase pursuant to the proration procedures described in the Offer to Purchase.

Notes that have been validly tendered (and not validly withdrawn) on or prior to the Early Tender Time, or that are validly tendered on or prior to the Expiration Time, cannot be withdrawn, except as may be required by applicable law.

The initial settlement date on which FEMSA will make payment for Notes tendered (and not validly withdrawn) on or prior to the Early Tender Time and accepted in the Tender Offer is expected to be June 20, 2024 (the "Initial Settlement Date"). 

The Tender Offer will expire at 5:00 p.m., New York City time, on July 3, 2024, unless extended or earlier terminated (such time and date, as the same may be extended or earlier terminated, the "Expiration Time").

All conditions described in the Offer to Purchase that were to be satisfied or waived on or prior to the Early Tender Time have been satisfied or waived.

FEMSA has engaged BofA Securities, Inc. to act as dealer manager in connection with the Tender Offer (the "Dealer Manager"). Global Bondholder Services Corporation is acting as the tender agent and information agent for the Tender Offer (the "Tender and Information Agent").

Any questions or requests for assistance regarding the Tender Offer may be directed to BofA Securities, Inc. at (888) 292-0070 (toll-free) or (646) 855-8988 (collect). Requests for additional copies of the Tender Offer documents may be directed to Global Bondholder Services Corporation at +1 (855) 654-2014 (toll-free) or +1 (212) 430-3774 (collect).

This press release must be read in conjunction with the Offer to Purchase. This press release and the Offer to Purchase contain important information which should be read before any decision is made with respect to the Tender Offer. The Tender Offer is made solely pursuant to the Offer to Purchase. None of FEMSA, the Dealer Manager or the Tender Agent and Information Agent or any of their respective affiliates, directors, officers, agents, attorneys or employees makes any recommendation as to whether Holders should tender, or refrain from tendering Notes pursuant to the Tender Offer and none of them has been authorized or has authorized any person to make any such recommendation. Each Holder is solely responsible for making its own independent appraisal of all matters as such Holder deems appropriate (including those relating to the Tender Offer and FEMSA) and each Holder must make its own decision as to whether to tender Notes pursuant to the Tender Offer and, if so, the principal amount of the Notes as to which action is to be taken.

This press release is for informational purposes only. This press release shall not constitute an offer to purchase or the solicitation of an offer to sell any securities, nor shall there be any such offer or solicitation in any state or jurisdiction in which such an offer or solicitation would be unlawful. The Tender Offer is not being made to Holders in any jurisdiction in which FEMSA is aware that the making of the Tender Offer would not be in compliance with the laws of such jurisdiction. The distribution of the Offer to Purchase or this press release in certain jurisdictions may be unlawful or otherwise restricted by law. Persons into whose possession the Offer to Purchase comes are required by FEMSA and the Dealer Manager to inform themselves about, and to observe, any such restrictions. 

Neither the Offer to Purchase nor any documents related to the Tender Offer have been filed with, nor have they been approved or reviewed by, any federal or state securities commission or regulatory authority of any country.  No authority has passed upon the accuracy or adequacy of the Offer to Purchase or any documents related to the Tender Offer, and it is unlawful and may be a criminal offense to make any representation to the contrary.

FEMSA Forward Announcement

The Tender Offer described above forms an integral part of the series of strategic initiatives announced by FEMSA in February 2023, as a result of a thorough strategic review of FEMSA's business platform. This review included the bottom-up definition of long-range plans for each business unit and the top-down analysis of FEMSA's corporate and capital structure. That announcement is available at: https://www.globenewswire.com/news-release/2023/02/15/2609255/0/en/FEMSA-Forward-Announcing-results-of-strategic-review.html. That announcement does not form part of this communication.

About FEMSA

FEMSA is a company that creates economic and social value through companies and institutions and strives to be the best employer and neighbor to the communities in which it operates. It participates in the retail industry through a Proximity Americas Division operating OXXO, a small-format store chain, and other related retail formats, and Proximity Europe which includes Valora, its European retail unit which operates convenience and foodvenience formats. In the retail industry, it also participates through a Health Division, which includes drugstores and related activities and Digital@FEMSA, which includes Spin by OXXO and Spin Premia, among other digital financial services initiatives. In the beverage industry, it participates through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world by volume. FEMSA also participates in the logistics and distribution industry through its Strategic Business Unit, which additionally provides point-of-sale refrigeration and plastic solutions to its business units and third-party clients. Across its business units, FEMSA has more than 392,000 employees in 18 countries. FEMSA is a member of the Dow Jones Sustainability MILA Pacific Alliance, the FTSE4Good Emerging Index and the Mexican Stock Exchange Sustainability Index: S&P/BMV Total México ESG, among other indexes that evaluate its sustainability performance.

Forward-Looking Statements

This press release contains forward-looking statements.  Forward-looking statements are information of a non-historical nature or which relate to future events and are subject to risks and uncertainties.  No assurance can be given that the transactions described herein will be consummated or as to the ultimate terms of any such transactions.  FEMSA undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason.

Cision View original content:https://www.prnewswire.com/news-releases/femsa-announces-early-tender-results-and-acceptance-of-notes-for-its-previously-announced-tender-offer-302174828.html

SOURCE FOMENTO ECONÓMICO MEXICANO, S.A.B. DE C.V.

FAQ

What are the early tender results for FEMSA's tender offer?

FEMSA's tender offer received $206.8 million worth of 3.500% Senior Notes due 2050 tendered by June 17, 2024.

What is the total consideration for FEMSA's early tender offer?

The total consideration is $794.94 per $1,000 principal amount, including a $30 early tender premium.

When is the initial settlement date for FEMSA's tender offer?

The initial settlement date for FEMSA's tender offer is expected to be June 20, 2024.

When will FEMSA's tender offer expire?

FEMSA's tender offer will expire at 5:00 p.m., New York City time, on July 3, 2024.

What is the tender cap for FEMSA's tender offer?

The tender cap for FEMSA's offer is $250 million in aggregate principal amount.

Why is FEMSA conducting this tender offer?

The tender offer is part of FEMSA's strategic review of its business and capital structure announced in February 2023.

Fomento Económico Mexicano, S.A.B. de C.V.

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